July 6, 2018
Further calls have been made for the Financial Adviser Standards and Ethics Authority (FASEA) to recognise the current education of financial advisers, with the FPA claiming the standards setting body has overlooked past-training relevant to the provision of advice.
In its response to a submission paper released by FASEA (see: Advisers Can Meet Education Standard in One Year: FASEA), the FPA recommended a reduction in the number of existing adviser categories, based on degree types, from the five to three.
The five categories listed in the FASEA proposal include:
- adviser with no degree
- adviser with unrelated degree
- adviser with related degree
- adviser with related degree and related post graduate qualification
- adviser with approved degree
While the FPA has recommended the following categories
- adviser with no degree
- adviser with any degree
- adviser with financial planning degree (at AQF7 level or above)
Under this model, all advisers would be required to be members of a code monitoring body by 2019, pass the FASEA exam by 2021 and comply with the FASEA Code of Ethics by 2024.
“…the current FASEA education proposal appears to overlook existing advisers’ past education that is specific to the provision of financial advice…”
Only advisers with no degree will be required to gain an approved degree, graduate diploma or masters qualification by 2024 while advisers with any degree will be compliant if they hold a graduate diploma, CFP certification or the eight unit Diploma of Financial Planning by 2024.
The FPA stated this model would recognise past and relevant financial advice specific education that was higher than the minimum RG146 standard as well as the study taken to gain financial advice certifications, including the CFP designation.
FPA Chief Executive, Dante De Gori said the FPA submission “…will address the complexity of the proposed framework and create a more practical and workable approach that simplifies the education pathways for all advisers”.
“As the current FASEA education proposal appears to overlook existing advisers’ past education that is specific to the provision of financial advice, we are strongly advocating for the framework to recognise quality, advice-specific education, such as the CFP Certification Program,” De Gori said.
He said research conducted by the FPA among its members found that 64 per cent held an undergraduate or post-graduate university degree but 84 per cent of those with a ‘non-related’ degree were not comfortable with the FASEA proposal, and believed their time and financial commitment has not been recognised by FASEA.
At the same time, 78 per cent of advisers with the CFP designation were not comfortable with the proposals and considered they already had the skills and qualifications to be considered compliant under new education proposals.
“A key responsibility in setting the new requirements is to ensure the financial planning profession remains sustainable so that advisers can continue to serve their clients in a practical and positive way,” De Gori said.
“Our research shows that the existing FASEA proposed education pathways will likely result in the departure of a large number of appropriately qualified financial planners from the profession,” he added.